1. Asian markets ended mixed. Japan's Nikkei +1.7%, China's Shanghai Composite -1.

0%, and Hong Kong's Hang Seng -1.1%. 2. Markets in China underperformed as the recent liquidity crunch intensified once again. The two-week Shanghai Interbank Offered Rate jumped almost 114 basis points to 6.218%. 3. As we expected, the FOMC decided to curtail its asset purchase program by a small amount, cutting the pace of its monthly purchases to $75 bln from $85 bln beginning in January. That decision, the directive said, was predicated on the cumulative progress that has been made toward maximum employment and the outlook for labor market conditions. For good measure, the FOMC also indicated that the current target range for the federal funds rate will likely be appropriate well past the time that the unemployment rate declines below 6.5%, especially if projected inflation continues to run below the committee's 2.0% longer-run goal. 4. The decision to taper was a surprise to many, but the stock market's reaction couldn't have been any better as far as the Fed (and most investors) was concerned. Following the news, stocks took off and both the Dow and S&P 500 ended at new record closing highs. The Treasury market finished near its lows, but those lows were in place before the FOMC decision. In other words, there wasn't any real interest rate fallout immediately after the FOMC decision. 5. Treasuries, however, are leaking this morning. The yield on the 10-yr note has risen five basis points to 2.95%, which is its highest level since September. The path long-term interest rates take, and the pace at which they proceed along that path, will be a dictating factor for the stock market. A quick push to 3.0% could unwind some of yesterday's postFOMC enthusiasm in the stock market. 6. That enthusiasm was based essentially on two factors: (1) the recognition that the economy is getting better, which should bode well for earnings prospects and (2) the acceptance of the Fed's forward guidance. 7. The negative leaning is owed in part to some expected profit taking after yesterday's 1.7% gain in the S&P 500, news that Facebook (FB) has filed for a 70 mln share offering, and, yes, the bump in long-term rates that the Fed doesn't control. 8. The latest initial claims report isn't having much bearing because seasonal adjustment problems have once again impacted the reporting, according to the Department of Labor. To that end, initial claims for the week ending December 14 rose by 10,000 to 379,000 (Briefing.com consensus 333,000) while continuing claims for the week ending December 7 rose by 94,000 to 2.884 mln (Briefing.com consensus 2.760 mln).

9. En otro orden, el Senado aprob el acuerdo presupuestario de dos aos, como se esperaba, con un cmodo margen.

10. Rising prices and borrowing costs have put homes out of reach for some first-time buyers, indicating faster job and income growth are needed to give residential real estate a bigger push. At the same time, the Federal Reserves decision yesterday to begin scaling back record stimulus may encourage purchases before rates head even higher. 11. Treasury notes dropped for a second day, pushing 10-year note yields to a three-month high, on bets the Fed will conclude its bond-buying program by end of next year as it steadily reduces purchases amid economic improvement.

Las Notas del Tesoro caen por Segundo da consecutivo, enviando a los rendimientos de las notas a 10 aos a mximos de 3 meses, en especulaciones que la Reserva Federal concluir su programa de estmulos monetarios (Quantitative Easing), citando seales de una recuperacin econmica.

12. The pre-auction yield on the $29 billion in seven-year notes being sold today compared with 2.106 percent at the previous sale on Nov. 27. At that auction, investors bid for 2.36 times the amount of debt offered, the lowest bid-to-cover ratio since May 2009. 13. The U.S. will also auction $16 billion in five-year Treasury Inflation Protected Securities. 14. The fed funds rate is going to stay low for a very long time. The outlook for inflation remains benign. 15. The U.S. plans to sell $29 billion of seven-year notes and $16 billion of five-year Treasury Inflation Protected Securities today in the last of four note auctions this week.

En la ltima subasta de la semana de las 4 de esta semana, se subastaron $29 mil millones de notas a 7 aos y $16 mil millones de Treasury Inflation Protected Secturities (TIPS). Las notas a 7 aos se colocaron con un rendimiento (yield) de 2.32%, por encima de los 2.106% en la venta previa el 27/11.

En esta subasta, el ratio bid-to-cover, el cual nos seala la fortaleza de la demanda de los activos ofertados, alcanzo el 2.36, la menor lectura desde mayo 2009. As mismo, dada la Decisin de Poltica monetaria del Comit Federal de Mercado Abierto (FOMC), evento macro driven, el volumen de negociacin el 18/12 en ICAP Plc, el mayor dealer-broker de deuda norteamericana, tuvo un incremento de 80% hasta $449.7 mil millones, el mayor nivel desde el 20/11. El promedio diario del 2013 es $312.1 mil millones. 16. The seven-year notes scheduled for sale today yielded 2.32 percent in pre-auction trading, compared with 2.106 percent at the previous sale on Nov. 27. 17. At that auction, investors bid for 2.36 times the amount of debt offered, the lowest bid-tocover ratio since May 2009. The prior five-year TIPS sale in August drew bids for 2.2 times the amount available, matching the lowest level since October 2008. 18. Trading volume yesterday at ICAP Plc, the largest inter-dealer broker of U.S. government debt, climbed 80 percent to $449.7 billion yesterday, the highest level since Nov. 20. The 2013 average is $312.1 billion. 19. The Fed said yesterday it will reduce monthly asset purchases to $75 billion from $85 billion, paring its quantitative easing program implemented to support the economy. The decision came after data this month showed improvements in employment, manufacturing and retail sales. 20. Two-year yields climbed the most in six weeks after the Federal Reserve said yesterday it would slow its stimulus program that has helped put downward pressure on borrowing costs around the world. The pound fell against the euro and dollar after jumping the most in two years against the single currency yesterday when a report showed the U.K.s jobless rate declined. 21. Sterling has strengthened 6.9 percent in the past six months, the best performer among 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. The euro rose 3.7 percent and the dollar climbed 0.7 percent. 22. The dollar climbed to the strongest level in almost two weeks against the euro as investors assess Federal Reserve plans to wind down bond-buying next year amid signs that economic growth is gaining momentum. 23. Deutsche Bank AGs volatility index for major currencies dropped to 7.88 percent from 8.03 percent yesterday. It rose to a one-year high of 11.21 percent in June after Fed Chairman Ben. S. Bernanke said the central bank may start slowing stimulus.

El Deutsche Bank AGs volatility index, ndice de volatilidad de las principales divisas alcanz el 8.03% el 18/12, tras conocerse el comunicado del FOMC, cerrando la semana en %. Este ndice alcanz el mximo del ao en 11.21% en junio luego que el Presidente de la Reserva Federal, Ben Bernanke, dijera que el banco central podra empezar a reducir estmulos monetarios.

24. Gold dropped below $1,200 an ounce to a five-month low as the Federal Reserve trimmed economic stimulus, reducing demand for a store of value. Silver tumbled. Prices tumbled into a bear market in April and are heading for the first annual decline in 13 years, as investors lost faith in the metal. Through yesterday, futures plunged 36 percent since reaching a record $1,923.70 in September 2011. 25. Hedge funds and other speculators raised their net-long position in gold 25 percent to 33,449 futures and option contracts in the week ended Dec. 10, U.S. Commodity Futures Trading Commission data show. Short bets, which slid 6.7 percent to 74,312, are still within about 7 percent of the record reached in July. 26. Gold has suffered all year on tapering fears and it is perhaps no surprise that the Feds announcement has caused further liquidation

Los precios del oro han sido presionados a la baja todo el ao, dado los temores del tapering

27. West Texas Intermediate crude rose for a second day after the Federal Reserve said it will reduce stimulus as the nations economic outlook improves and as U.S. fuel consumption increased. 28. Total U.S. petroleum demand increased last week to the most since 2008, according to the Energy Information Administration. 29. Total petroleum demand increased 13 percent last week to 21 million barrels a day, the most since April 2008, the EIA said yesterday. Consumption of gasoline climbed for the first time in six weeks, up 8 percent to 9.02 million barrels a day, according to the EIA, the Energy Departments statistical arm. 30. U.S. crude stockpiles slipped by 2.94 million barrels to 372.3 million, bringing the threeweek decrease to 19.1 million, according to the EIA. Companies in Gulf Coast states typically delay imports and minimize supplies at the end of the year to reduce local taxes.

31. West Texas Intermediate traded near the highest price in a week after crude stockpiles declined in the U.S. and the Federal Reserve said it will reduce stimulus as the nations economic outlook improves. 32. Copper declined for a third day as the dollar strengthened after a Federal Reserve decision to taper stimulus and funding costs in China surged, curbing the demand outlook for industrial metals. 33. A strong dollar boosts costs for metals buyers in other countries. Chinas interest-rate swaps hit a record as the central bank refrained from injecting cash into the financial system. 34. Chinas seven-day repo rate, a gauge of funding availability in the banking system, extended gains after yesterday jumping the most since a record cash crunch in June.. 35. They have been trying for some time to get across the point that expectations about the path of asset purchases and about the path of interest rates should be two separate things, but earlier in the year, there seemed to be some confusion in the markets about that, Woodford said. Yesterday, the Fed underlined the difference quite firmly and the market reaction suggests that this is now considered credible. 36. Yields on Fannie Mae mortgage securities that guide U.S. home-loan rates climbed to the highest in three months after the Federal Reserve said yesterday it will trim its total monthly bond purchases by $10 billion. A gauge of company credit risk was little changed. 37. The Markit CDX North American Investment Grade Index, a credit-default swaps benchmark used to hedge against losses or to speculate on creditworthiness, was little changed at 67.5 basis points as of 11:35 a.m., according to prices compiled by Bloomberg. The credit-swaps benchmark has averaged 79.8 basis points this year and reached a sixyear low of 67.3 on Dec. 9. 38. The risk premium on the Markit CDX North American High Yield Index, tied to the debt of 100 speculative-grade companies, decreased 0.4 basis point to 328.4, Bloomberg prices show. High-yield, high-risk bonds are rated below Baa3 by Moodys Investors Service and less than BBB- at Standard & Poors. A basis point is 0.01 percentage point.